The capitalization of the Moscow Stock Exchange has decreased to 49.6 trillion rubles for the first time since the summer of 2023.

The main stock index fell 10% to 2,650.3 points. Compared to the annual high, it fell by a quarter.

In September, the market continued to fall. On September 3, the Moscow Stock Exchange index approached 2,500 points. That day, the market capitalization fell to 38.8 trillion rubles, said independent financial analyst Pavel Ryabov.

The head of the Bank of Russia, Elvira Nabiullina, explained the market decline by several factors. Among them was an increase in the key rate from 16% to 18%, which made other financial instruments more attractive.

Investors are also adjusting expectations regarding companies’ financial results against the backdrop of tough monetary policy conditions and changes in tax regulations. In addition, the fall in share prices could be due to the refusal of several companies to pay dividends for 2023.

The Central Bank has closed the loophole for the purchase of securities from non-residents and hopes that the market will stabilise. In August, the stock market capitalisation amounted to 62.8 trillion rubles. Russian President Vladimir Putin has set himself the goal of doubling the capitalisation of the stock market by 2030 and increasing its share of GDP to 66%.

The regulator has proposed to the Ministry of Finance and the Ministry of Economic Development measures to stimulate IPOs and SPOs, including tax breaks and subsidies. The Moscow Stock Exchange index rose by 2.5% on September 13, despite the rate hike to 19%. Experts expect the market to be under pressure in the coming months.

According to their forecasts, the ruble may fall slightly due to the drop in oil prices, but rate changes will not have a significant impact on currency pairs. Analysts advise investors to consider investing in floating rate bonds and money market funds.

• Starting from September 24, the Moscow Stock Exchange decided to additionally calculate its main stock market index, the yuan exchange index. In addition, the total profitability indexes (gross and net) will be calculated in a similar way.